The Everything Store

Jeff Bezos and the Age of Amazon

In a casual insight at the end of this award-winning book about Amazon, Brad Stone points out that Amazon’s reputation as the all-powerful “everything store” is quite recent, dating from around the time of the global financial crisis.

“The economic crisis served as a kind of cloaking device, hiding Amazon’s evolution into a dangerous diversified competitor,” Stone says. “Beginning in 2009, as the fog of the economic crisis lifted, the world was broadly recognizing Amazon’s potential … For the first time, Amazon was spoken in the same breath as Google and Apple.”

It is jarring to think how quickly Amazon.com went from being a place where people bought books, and maybe DVDs, to a retail universe that can get most of the things you need in life delivered to your doorstep the next day – along with free access to Amazon-financed TV shows.

This pro-Amazon book skillfully tells the story of the work and ingenuity that took the company from scrappy online bookseller to global dynamo. The author is in awe of Jeff Bezos. But when he talks about the company and the man interchangeably, it is because there not much separation: “In a way, the entire company is scaffolding built around [Bezos’s] brain—an amplification machine meant to disseminate his ingenuity and drive across the greatest possible radius.”

Both Bezos and Amazon come across as a weird mixture of consumer crusader and megalomaniac, fighting to give consumers better prices and more choice while also hoping that Amazon drives all competitors out of business. The man and the company come across as a weird mixture of frugal and extravagant, forcing employees to work on desks made of recycled doors while blowing hundreds of millions of dollars on questionable projects like the Fire Phone. The book’s achievement is to take the reader inside the head of Jeff Bezos and dissect his philosophy of growth at all costs (the Fire Phone can drive growth, so why not spend hundreds of millions giving it a try; employees’ desks cannot drive growth, so what is the cheapest material available?).

In the far-sighted or insane logic of Amazon, the god of growth compels the company to accept minimal, zero, or negative margins on its retail sales in order to expand market share in more and more markets. The gears of the company force an ongoing sacrifice of cash today for more customers tomorrow, of earnings in the present for market power in the future. The logical endpoint seems to be the entire retail sector, beaten by Amazon’s “destructive discounting,” falling under its gravitational force field. And then what? If this is Phase One, what is Phase Two?

OUR TAKE

This definitive book is required reading for anyone in e-commerce and anyone producing consumer goods sellable on the internet. Chapter 8, about Amazon warring with book publishers while developing the Kindle, is a case study about how Amazon accelerates development of some industries while destroying the business models of incumbent suppliers.